- Tram Ho
On CNBC’s Squawk Box Asia program on April 14, senior researcher Tom White from DA Davidson said that it is clear that investors are increasingly interested in the roadmap leading to profits. However, there has been a change in investor sentiment, from the focus on growth and increasing market share to more balanced approach.
“Though still focused on breakeven point, investors are more likely to grab more time to invest in a new product category,” said Tom White said.
Earlier, on 13/4, Grab notice issued shares in the US in the coming months through a merger with Altimeter Growth. The deal could raise Grab’s valuation to $ 39.6 billion. This is a blank check mergers world’s largest, was established to raise money to buy the private company.
Grab is expected to lose $ 600 million this year. Photo: Bloomberg
Overall, Grab is still not profitable. 2020 Grab loss of $ 800 million based on indicators EBITDA (earnings before tax, interest and depreciation) and the expected loss of $ 600 million this year. EBITDA is considered a measure of the financial health of a business.
Grab said that EBITDA for the transport division has been positive since the fourth quarter of 2019. Adjusted net sales for 2020 reach $ 1.6 billion and are expected to grow to $ 4.5 billion by 2023. Grab estimates it could generate $ 500 million in EBITDA in two years.
“If you look at the two core businesses, Grab is doing quite well. All of their markets in the ride-hailing sector are at least profitable in terms of EBITDA, so are 5 out of 6 food delivery markets.” , Said Tom White.
White thinks Grab will be given more time to invest in new types of additions, new categories, new products, considering what it can do in the two traditional categories.
Meanwhile, Sachin Mittal – Vice Chairman of DBS Bank said losses occurred when trying to capture market share, especially in the current environment when cheap capital is available and helping the company to build scale and reduce spending. fees.
“So you have to be the market leader, build scale, reduce costs, and in the end, when the money isn’t cheap anymore, it’s time you can make an immediate profit because you already have it scale, “said Sachin Mittal.
Mittal added that investors could be attracted because Grab dominate areas such as delivering food. Investing in Grab shares also gives them access to the Southeast Asian fintech market.
One of the core array of Grab as financial services, including electronic payments, loans, insurance, bank number, asset management. Unicorn has not proven to be a leading role in fintech, this will be a high growth segment and “burning money” in the short term. Therefore, the capital that Grab raised during the IPO can be used to deploy fintech.
In the merger with Altimeter Growth, Grab will receive $ 4.5 billion in cash, including $ 4 billion in private investment in public equity (PIPE) from BlackRock, Fidelity, T. Rowe Price, Counterpoint funds Global and Temasek.
Source : Genk